The accused is an independent PC recycler and anti-electronic-waste activist of sorts. He observed that non-technical PC owners who ran into problems that require reinstalling Windows, upon realizing they no longer have their restore disc, either throw out their computer and buy a new one, or buy the latest version of Windows at retail pricing.

This is wasteful and unnecessary. Dell is fine with this because uninformed consumers will unnecessarily buy a new PC. Microsoft likes it because they will unnecessarily buy a new copy of Windows, unaware that they already have a valid license.

This seems to be the basis of their claim to “lost profits”. They said that these restore discs, allowing consumers to use a product to which they are already entitled, “displaces potential sales”. Shameful.

The guy being thrown in jail was not selling counterfeit discs in any meaningful sense. He was printing restore discs, without the license, and distributing them for roughly the cost of shipping (25 cents each).

His copies were useless to anybody who didn’t already own them. He did not sell licenses. You could not install the software without buying Windows. Having these does not even make it easier to pirate Windows.

The prosecution apparently originally claimed that each disc was worth $299, showing their total ignorance of how software licenses work.

You are dramatically characterizing the case. The Feds are the plaintiffs in this case, not Microsoft. The man isn't going to prison for just distributing disks, he's going to jail for fraudulently claiming that his disks were authentic and going so far as to get the original disk design printed on his fake disks. The government originally claimed that the copyright violations on these disks were valued at several hundred dollars per disk, but Microsoft had that value reduced to about $25 per disk, so Microsoft actually helped to reduce his punishment.

No, that’s not true either. Read the court documents. He is going to prison for pirating Windows specifically. The judge even used the word pirating. Which, he clearly did not do. He distributed a copy of what is otherwise free, from both OEMs and Microsoft themselves, and could only be reasonably valued at $0, on a disc. The government even explicitly said that the infringed item was not the disc itself, but the software on the disc. That software was not counterfeit. It was Windows, the same Windows on MSDN, but with no license.

Also, Microsoft did not have the value reduced, nor did they help him at all.

I went to the website the article linked to where it said that anyone could download it for free. You can't download it without the product key.

Is it overreach by Microsoft - yes. But did he download the product with his license key and distribute it?

There is a lot of closed source software that you can get for free but you aren't allowed to distribute. The first time I encountered the issue was back in 1996. I downloaded a bunch of internet tools and placed them on a public folder for customers to use of an ISP I did Mac support for (Netscape, MacTCP, etc.). I was told I couldn't do that.

When you install the software, the license key comes from the computer (it's stored on the motherboard), or potentially typed in by the user, not from the disc. The discs don't work if you don't have your own key.

Distributing the discs is copyright infringement, but the penalty is proportional to lost revenue. MS didn't really lose any money from this but they claimed that they did.

A more reasonable interpretation of this is that the purpose of the disc had to be clear. If a customer needs something to restore their Dell, they are looking for something that says it’s a Dell restore disk.

If there were a profit component to this, using their trademark looks damning. In context, though, it’s clear that the intention is convenience for the customer to identify the correct tool. That doesn’t grant an exemption to violating trademarks, but the penalty should be proportional.

For 28,000 discs at 25 cents each, after shipping and printing costs, this guy is not making money.

Throwing him in jail for helping confused old people get their PC back up and running is a travesty.

He was not selling the discs for 25 cents each. That's the story he's spinning in the media to look like the good guy. You can see in the appeals document that his price was not near 25 cents.

>Lundgren objected to the PSR infringement amount. He argued that the Sentencing Guidelines required the court to use an infringement amount of about $4 per disk, which was the price for which Lundgren and Wolff were selling their copies.

Except that if professional refurbishers had computers with a valid Certificate of Authenticity, but a disc that said "Eric's restore disc", they would've had to buy new Windows licenses for the computers because the license is not valid without the original restore media. Otherwise they would have been guilty of copyright infringement and subject to possible legal action by Microsoft for selling unlicensed copies of Windows.

Can we remove this link? They didn't jail him for copying software. The issue was he created copies with the intent to sell them. He also branded the disks to make them appear as if they were created by Dell.